Section 71 — Withdrawal of exemption in certain cases

(1) The profits or gains arising from the transfer of capital asset not charged
under section 67 by virtue of section 70(1)(c) and (d) shall, irrespective of any-
thing contained in the said clauses, be deemed to be income chargeable under the
head “Capital gains” of the tax year in which such transfer took place, if at any time
before the expiry of eight years from the date of such transfer,—
( a) the transferee company converts the capital asset into, or treats it as,
stock-in-trade of its business; or
( b) the parent company or its nominees or the holding company, ceases or
cease to hold the whole of the share capital of the subsidiary company.
(2) If any of the conditions laid down in section 70(zd) or (zf) are not complied with,
the profits or gains arising from the transfer of such capital asset or intangible asset
not charged under section 67 by virtue of such conditions shall be deemed to be the
profits and gains chargeable to tax under the head “Capital gains” of the successor
company for the tax year in which such conditions are not complied with.
(3) If any of the conditions laid down in section 70( ze) are not complied with, the
profits or gains arising from the transfer of such capital asset or intangible assets or
share or shares not charged under section 67 by virtue of such conditions shall be
deemed to be the profits and gains chargeable to tax under the head “Capital gains”
of the successor limited liability partnership or the shareholder of the predecessor
company, for the tax year in which such conditions are not complied with.